The Covid-19 crisis will accelerate consolidation in the Russian banking sector by creating M&A opportunities, the co-founder of the country’s third-largest privately owned lender tells Euromoney.
Sergey Khotimskiy, who set up Sovcombank in 2001 with his brother Dmitry, says the sector will take a “significant hit” from the pandemic.
“We expect the net profit of the banking industry in Russia to be 50% lower in 2020 and 2021 than last year,” he says. “We also see growth at around zero this year.”
While he believes most local lenders will survive the crisis, Khotimskiy says it will likely prompt shareholders in less-profitable banks to look for an exit.
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Sergey Khotimskiy, |
“There will be some smaller bank failures, but these days even medium-sized banks in Russia are quite strong,” he says. “However, there are several players that have strong balance sheets but are struggling in terms of their business model and failing to achieve good returns on equity.”
That could create an opportunity for Sovcombank, which has a track record of snapping up unwanted assets after crises, often from foreign shareholders.
